HealthStream, Inc. (Nasdaq: HSTM) announced its financial results for the third quarter ended September 30, 2026, reporting a 8.9% increase in revenue to $83.3 million. This figure represents an increase of $6.8 million compared to the $76.5 million reported in the third quarter of 2025.
The company attributes the revenue growth to a $6.2 million increase in subscription revenues and a $0.7 million increase in professional services revenues. HealthStream notes that the growth was positively impacted by $3.2 million from acquisitions of Virsys12 and MissionCare Collective completed in the fourth quarter of 2025, as well as $3.6 million from growth across its existing portfolio of solutions.
Despite the top-line growth, operating income decreased by 13.0% to $6.6 million from $7.6 million in the prior year. The company attributes this decline to higher operating expenses supporting investments in platform and enterprise applications, including personnel costs, third-party software expenses, cloud hosting, and amortization from the 2025 acquisitions. Additionally, operating income was impacted by a cybersecurity incident expense of approximately $250,000 incurred during the quarter.
Net income for the quarter was $5.4 million, down 11.7% from $6.1 million in the prior year. Diluted earnings per share (EPS) decreased to $0.18 from $0.20 in the third quarter of 2025. Adjusted EBITDA, a non-GAAP measure, increased by 1.0% to $19.3 million.
For the nine months ended September 30, 2026, revenues totaled $248.2 million, a 10.6% increase over the same period in 2025. Operating income for the first nine months increased by 25.7% to $22.4 million, and net income increased by 13.6% to $18.0 million.
In other business updates, HealthStream received $40 million in cash proceeds from a private placement of common stock to WJRJJ Ventures, LLC at a price of $29.50 per share. The company also announced that its previously authorized share repurchase program expired on September 12, 2026, having repurchased 432,476 shares at an aggregate fair value of $9.3 million.
The company has updated its full-year 2026 guidance. HealthStream now expects revenue between $331.0 million and $333.0 million, net income between $21.8 million and $22.4 million, and adjusted EBITDA between $77.0 million and $78.0 million. The company also declared a quarterly cash dividend of $0.035 per share, payable on November 27, 2026, to holders of record on November 16, 2026.
